Correlation Between Alumil Rom and Artego Tg

Can any of the company-specific risk be diversified away by investing in both Alumil Rom and Artego Tg at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alumil Rom and Artego Tg into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alumil Rom Industry and Artego Tg Jiu, you can compare the effects of market volatilities on Alumil Rom and Artego Tg and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alumil Rom with a short position of Artego Tg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumil Rom and Artego Tg.

Diversification Opportunities for Alumil Rom and Artego Tg

0.29

Correlation Coefficient

Alumil Rom  Artego Tg

Modest diversification

The 3 months correlation between Alumil and Artego is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Alumil Rom Industry and Artego Tg Jiu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artego Tg Jiu and Alumil Rom is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alumil Rom Industry are associated (or correlated) with Artego Tg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artego Tg Jiu has no effect on the direction of Alumil Rom i.e., Alumil Rom and Artego Tg go up and down completely randomly.

Pair Corralation between Alumil Rom and Artego Tg

Assuming the 90 days trading horizon Alumil Rom Industry is expected to generate 0.82 times more return on investment than Artego Tg. However, Alumil Rom Industry is 1.22 times less risky than Artego Tg. It trades about 0.0 of its potential returns per unit of risk. Artego Tg Jiu is currently generating about -0.06 per unit of risk. If you would invest  272.00  in Alumil Rom Industry on October 21, 2024 and sell it today you would lose (3.00) from holding Alumil Rom Industry or give up 1.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Alumil Rom Industry  vs.  Artego Tg Jiu

Alumil Rom Industry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alumil Rom Industry has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Alumil Rom is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Artego Tg Jiu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artego Tg Jiu has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Alumil Rom and Artego Tg

The main advantage of trading using opposite Alumil Rom and Artego Tg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumil Rom position performs unexpectedly, Artego Tg can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Artego Tg will offset losses from the drop in Artego Tg's long position.

The idea behind Alumil Rom Industry and Artego Tg Jiu pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.